Thailand stock market crash
In , the SE Asian Tigers all faced severe economic stresses, partially triggered by a primarily foreign capital-funded massive real estate bubble in Thailand. And just as the world learned nothing from huge stock market crashes in as Central Banks have used the exact same tactics from back then to duplicate the re-inflation of massive US and European stock market bubbles today, it seems Asia is having a massive problem learning from the tragedy of as well.
Consequently, when massively pumped-up and distorted asset prices collapse, it is of no consequence to the bankers that created them other than in magnitude of profits as they always front-run markets, exit them well before their own personal accounts would be destroyed, and short these markets on the way down based upon their inside information. Crises, in fact, are wonderful opportunities for the banking class to transfer wealth from the have-nots to themselves, as has continued to happen since Thus given that we have even larger capital bubbles now than we did in , bankers are salivating over the wealth transfer prospects now at hand.
As I stated above, one of the key conditions, if not THE key condition, of the Asian financial crisis was the unchecked massive foreign capital inflows into the SE Asian Tigers in the s that created easy liquidity responsible for the massive distortions of real estate market prices. In fact many Thai real estate developers borrowed capital in the form of unhedged USD-denominated loans during that time, lured by the cheap cost of borrowing US dollars.
Today, I hear the same thing that was stated pre crisis all the time from financial advisers in Thailand: Why do you think Thailand has so much liquidity in ? Could the answer have anything to do with the fact that the Bank of England, the ECB, the Bank of Japan and the US Federal Reserve have all created trillions upon trillions upon trillions of dollars, euros, yen and pounds out of thin air, all available at dirt-cheap interest rates, and jammed it into the global financial system to keep the global Ponzi banking system alive?
What conditions could possibly create a rapid evaporation of the current easy liquidity? What safeguards has the government taken to guard against a rapid exit of liquidity and are these safeguards adequate? During , in the period that immediately preceded the SE Asian economic meltdown, capital inflows in Thailand increased more than seven fold from just 5 years prior to a stunning The vast majority, or 7.
The remaining capital inflows outside of offshore loans consisted of portfolio capital inflows 1. But is this assessment accurate? To get the bottom of this question, we must first investigate what happened in and around that caused such a drastic shift in capital inflows as a percent of GDP in Thailand?
To begin, the already stated relaxation of financial regulations in drastically altered the behavior of capital inflows to Thailand from bank-sourced capital inflows that averaged 6. The reason offshore bank loans as a source of financing in Thailand soared after deregulation was simple economics. US prime rates and LIBOR rates were typically multiples lower than Thai bank interest rates.
If you look at the chart below, you can see that this problem of cheap offshore financing has persisted in recent years, and as it did during the build-up to the crisis, low offshore interest rates are once again contributing to the same massive, bubbly capital inflows that caused the Thai real estate crash in World Economic Outlook, 9 July Deloitte Research, Deloitte Services LP, is right on board with the IMF in predicting stability in economic growth despite huge capital bubbles in Thailand, stating in their outlook for Thailand: Asia Pacific Economic Outlook, May However, I believe that by H2 of , if not earlier, the Thai Real Estate market will begin to show some real serious stresses from all the wasteful destructiveness of Western Central Banking monetary policy.
Thailand Board of Investment. Thus, a sudden stoppage of inflows would have devastating effects on the Thai economy. So since Western and Japanese banking institutions are doing nothing to stop the capital inflows into Thailand with their near zero interest rate policies, lets see what the Thai government has done to prevent these enormous inflows from suddenly reversing direction as it did in , causing the Thai baht to plunge to a record 50 baht per dollar continued To finish reading this white paper, please visit our website at https: This white paper may NOT be published, or re-printed on any other website or publication.
Only the first paragraph of this article may be re-printed with a link back to this site. Recently looking to tap dollar bond sales says they are in need of liquidity and if baht devalues they are left with load of debt to pay down.
The Thai banking system is not the same now as the US system was leading up to the financial MBS meltdown. Also, they will actually verify your income, check the real property clearly, etc. If you do a construction loan, they are very strict on the progress payments. So if you send money in, you better be prepared to deal with paperwork for funds to exit. Makes it a bit more complicated to "flip" real estate. There may very well be foreigner's driving up prices by paying cash, if they don't perform due diligence.
It is not hard to find comps for real estate here This info is available online as well. In other words, if you are a sucker, you may overpay. Thailand has been hit by inflation, just like everywhere else. This is a result of seemingly uncontrolled and endless printing by all of the central banks. This is destroying some sovereign economies look at Egypt, and India, for example.
I think this needs to be factored in to the prices of real estate, etc.
It's a global Bubble due to EZMoney for the Few. How it will end? RE runs in cycles like everything else. For RE my old prof tells me it runs in year cycle Thailand has a lot of problems and probably is a failed state in the making but to say the RE bubble here is the biggest problem in SE Asia is an exaggeration. Bigger than dessertification in China, bigger than water shortage in India, bigger than Islamic invasion of Myanmar and Thailand, bigger than off balance sheet financing of govt spending, bigger than massive debt of consumers and goverhment?
Yes Thai real estate prices are insane but most of the speculative markets see houses and condos bought for cash not financed. Speculators can simply wait it out. Will the market crash? Will it be anything compared to the SET crashing or when the shinawatra criminal syndicate sends the red shirt mobs marching on Bangkok again after the passing of HM occurs?
Real estate will crash but it wont be the main event. Most family farms are held, but with prices folks will sell, and that family will never again be free. Virtually everything for locals except petro for their scooter is free. Hell even the hooch is made from local rice, and is free, if you consider that most hooch is made from left over 'sticky-rice'. I guess the problem is like Faber say's every body is printing money, including the chinese, and that money flows to thailand, and it will destroy these peoples native way of life.
Good news is you just stay far from the corridors of chinese investment, the chinese prefer to be near the super highways they're building all over SE-asia, stay far from bridges and railroads and super-highways, and you just might think your living in the 's.
There still are many road-less areas in myanmar, laos, and thailand, that are far from anything a chinese will ever see, one last thing about chinese, they're just like japs when they travel, they all go to the same place. I dont know what rolled up newspaper you live in at B a month, but even pretty much a dump small, single room will run you about B2, a month. Even in the absolute boondocks you wont be finding B a month for anything we would consider livable.
Malaysia has a minimum investment for foreigners buying real estate. Compared with thailand, the prices are generally higher but the build quality is probably higher as well. I'll go take a look at Thailand in january and compare. Myanmar and Laos are fucked by China money coming down, word is that the chinese have already bought Udon-Thani, and with the new bridge at chiang-khong, the thais are bitching like hell about the rise, in prices but its all chinese money.
Here's the fucking deal, as a foreigner, I CAN-NOT buy land in SE-asia if I wanted too, but a chinese person can, and that is the fucking problem.
In china, here its millions of yuan for a fucking 'flat' what we in the west would call a 'compartment' apartments are big. The problem is easy chinese money, but the real fucking problem is the se asean gubmints letting these chinese buy the poor's land with FIAT, and so tomorrow much of se-asia will be renters. Who would have guessed that chinese communists would have enslaved all those outside of china with capitalist fiat?
Who would have guessed that SE asia governments would have participated in the swindle? I woud certainly have predicted it knowing the history of Asian government. It's not like these places were ever big on individual or property rights.
In India, it was the Brahmans, in China, the ruling elite and now the Communist Party, same in Vietnam and Loas. As noted, the real value of the Thai bubble is tiny.
So color me shocked that these nations are not acting in the best interests of their citizens. Or maybe they are. Perhaps they see Chinese influence as a path to the next technological generation.
Perhaps they see the writing on the wall and realize the muscle-intensive, crowded societies of the past are finished. Perhaps they think that pain now will be for the "greater good" - much as the Chinese one-child policy. You certainly have a better perspective than we do. This may or may not be a good article. But since you have to subscribe to actually read the entire thing including the part where he actually makes his case , I have no idea.
The writer of this article has diarreah of the fingers. I've lived in Asia for 20 years and seen many a bubble and lived in Thailand for 5 years. Thailand is still undervalued in the region. Just compare prices to Singapore, Myanmar, Vietnam. All are more expensive TODAY than Thailand. Myanmar pricing near the airport in Yangoon is more expensive than financial district Bangkok. WTF are these guys talking about who wrote this article?
Where can you get that in Asia?
Not in a LOT of places. Now let's talk about oversupply.
Timeline Of The Crash | The Crash | FRONTLINE | PBS
Yes there could be an oversupply coming onto the market in the near future. But not for all of the land of Thailand, but for apartments in Bangkok.
There is oversupply here but nothing compared to what I see in China. The land here is fertile, i. Any seed, take your pick. Housing here downtown or suburban Bangkok is a FRACTION of most of China and Asia pricing. Go outside of Bangkok greater metro and the pricing is well pretty cheap considering. You measure a bubble by measuring household debt horrible in Thailand , price to salary ratios horrible in Thailand , NPL's not good, although the BoT is doing their best to cover this up and the percent of investment dollars flowing into an investment class vs the historic mean oh yeah, it's a bubble.
For someone who lives in Bangkok, it's amazing that you don't seem to notice that there are giant billboards for luxury condos every 10 meters. You obviously have zero idea what a bubble looks like. You're like one of those realtors who says "There's no bubble, because there is demand". And your summation that Thai real estate is a "good deal", misses the mark. It may be a good deal to you as a foreigner, but that is hardly the point.
And if you think Thailand's relatively small export economy can handle a spike in salaries while ASEAN is about to put unbearable downward pressure on Thai salaries then you're in for a rude shock. Add to that the disastrous quality issues, collapsing western demand, coming baht devaluation, political uncertainty, etc And there's no possible way to make a strong case for Thai real estate.
POPO what bubble do you live in? What is the price per square meter of land where you live brother?
Do you dare to actually compare and post it? Do you even know what the price is? The world is flat and might as well share the price. You buy a piece of land and it will feed your family with its fruits. Not a bad ROI.
They go down south to Thailand, get a gal pregnant, and buy her a house, and now they have a family, with no limit to the number of children,. Go on the internet and 'chat' with thai women, and ask if she is a single-mother?
How I lost k on my Condo in Thailand – Part III – Harald Baldr Men's Expat Magazine
Then ask where is the father? A lot of the women on the internet, they'll not lower themselves to work the 'bar', but they have no problem hustling money on the internet from lonely fools chinese and thai , especially since thai women don't speak chinese, often the language intermediary is 'english', so its easy to hook up and learn, talk about anything including real-estate prices.
Anyways the problem here is foreign money will drive up real estate so high that local poor will lose their farms.
The gubmint long had a ban on foreign ownership, but somehow the chinese are exempt. I visited bangkok in , liked the people and the food, a bit humid, the beer at the movies was a nice bonus. There may have been foreign capital flooding into Thailand in the '90's, but Thai real estate is denominated in Baht, the obligation of the Bank of Thailand.
Thai Markets Closely Watched in Wake of King’s Death - WSJ
A real estate bubble is thus the product of the inflationist policies of the Thai government. The Asian crisis was the result of the massive buildup, then liquidation of bad debt. Do some investigation into what happened in the Solomon Islands, if you want to see what can happen when the S really HTF.
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Comment viewing options Flat list - collapsed Flat list - expanded Threaded list - collapsed Threaded list - expanded. Date - newest first Date - oldest first. Select your preferred way to display the comments and click "Save settings" to activate your changes. I live in Bangkok and have for 13 years. I wouldn't buy a green Banana in this Country. Life of Illusion Nov 19, I can see the point of the article, but I don't think the author has "explained it well.
Stuck on Zero Nov 19, 9: Are you reading this? CheapBastard Nov 19, 9: Well it is a problem, and the bubble will burst. Teachers, cops, folks with a gubmint job. Amagnonx carlin Nov 19, Popo laosuwan Nov 19, 9: Living in China and traveling all over SE asia, monthly I'll toss in my observation. Cookie Nov 19, 8: Who listens to the IMF? Popo Cookie Nov 19, 8: Their finance minister is like Baghdad Bob. Oldrepublic Nov 19, 8: Popo Nov 19, 8: Machination Nov 19, 8: Popo Machination Nov 19, 8: Your measure of a bubble is to compare it with bigger bubbles?
And what was that about planting seeds? Machination Popo Nov 19, Popo Machination Nov 20, 3: They go down south to Thailand, get a gal pregnant, and buy her a house, and now they have a family, with no limit to the number of children, Go on the internet and 'chat' with thai women, and ask if she is a single-mother? Living there full time is a true adventure no doubt.
The Biggest Disaster in SE Asia Waiting to Happen: Thailand’s Massive Real Estate Bubble | Zero Hedge
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